Calif. Fund Surcharge Is Law
By Caroline McDonald
NU Online News Service, Sept. 11, 3:16 p.m. EST?A measure to protect the solvency of the California Insurance Guarantee Fund by continuing a two percent assessment on workers' compensation insurance premiums has been signed into law by Gov. Gray Davis.
The surcharge, which was scheduled to sunset at the end of this year, as of Monday is extended until 2007.
"Most other states actually have a two percent assessment, so this is bringing California in line with many other states," said Nicole Mahrt, director of public affairs for the American Insurance Association in Sacramento. "Given the number of our workers and the importance of this system, it's very important that we have a solvent Guarantee Fund."
Ms. Mahrt continued that the backup system ensures that employers who pay for workers' comp insurance have a carrier to go to "when there are claims, even if the carrier goes insolvent."
The bill, AB 2007, received a vote of 25-12 by the Senate and 53-24 by the Assembly.
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